we've had a series of seven technical conferences. at the first five were regional and then we dug down to a series of issues on communications, whether people are comfortable talking to each other when there is a weather related to supply squeeze then we talked about the mismatch of the electric trading day and i'm happy to report we issue a final rule on the protocol just last month and i want to thank omb.

they made an effort to make sure we had a 30 day turnaround to make sure it would be effective before we go into the really tight season this year. they deserve some things for that. on electric reliability we have an independent issue on the effectiveness of the antiwar the committee to be aware of the fact that we are looking at some potentially pretty tight situations. at the midcontinent independent system operator perhaps as early as the summer of 2015 but certainly as soon as the summer of 2016. it's something i think really deserves your attention. i know they are working heavily with the states to come up with solutions. we are happy to let them solve it a but the time is tight. they can tell you the numbers but we are looking at small

reserve margins for the footprint and we recall that under the agreement they all share the surplus but they also share the deficits so if there is a regional deficit, the pain will be shared in terms of frankly rolling blackouts if it comes to that. we can hope for a cool summer in the summer of 2016 that's not necessarily a prudent approach. with that i would be happy to answer any questions. >> our next witness is mr. john morrissey and you are recognized for five minutes. >> good morning chairman, ranking member and members of the subcommittee for holding this hearing and the opportunity to testify. as i acknowledged there is a significant change occurring on the energy landscape. the operation in america has experienced only a modest incremental change over the last decades yet in recent years the development of new technology is

bringing much more rapid change to the system that can't be disruptive. i think embracing these changes will allow a much more efficient utilization of energy resources. the challenge before us is to enable the system to be more efficient through the utilization of technology and foster the development of a diverse set of competitive energy resources while at the same time and sure we have the power and reasonable rates for consumers. as a result of the technology we are experiencing a supply of natural gas and resulting gas prices at the lowest since 2002. this is changing the economics of electric generation resulting the retirement of older and less efficient units and most recently some nuclear plants. the generation being built is primarily combined gas plants, wind and solar generation. this appears likely to continue.

driven by a significant degree the economics on low-priced gas and the development of more productive when the turbines and panels. the other drivers are little to no growth, public policie polics the standards, compliance with the rules implementing the standards into the development of the me inside management technologies like energy efficiency and demand response. at the same time change is occurring in the electric generation we are experiencing significant development in technologandtechnology around td operations to read a large percentage of the transmission distribution grid is quite old and only modest technology has been made in a sensory of operations. that system is being replaced. most commonly referred to as a smart grid that is opening up multiple opportunities for efficient utilization of energy resources and expanding the marketplace for electricity to the supply of diverse energy

resources. one of the recent focuses has been the adjustment of market rules and regulations to ensure all resources are able to compete in the market and energy system. the investment in new technology and jobs and energy production and management of the consumption is critical for maintaining a competitive energy economy and efficient utilization of resources. as if change is providing stability, market access and regulatory treatment is critical maintaining the continued investment in the energy infrastructure. my testimony covers many actions to reflect the efforts to make adjustments around the new technologies and resources. i will be happy to answer any questions you have and help you in your oversight responsibilities of the agency. >> thank you.

the next witness is mr. clark. >> mr. ranking member and members of the committee i am the newest members and i've had the opportunity to speak before you in a previous job but this is my first opportunity so thank you for the invitation to be here today. in my opinion this is something you referenced the biggest story today is the revolution that's taking place. probably the biggest story in decades and the flood of domestic gas has upended the utility planning model and market fundamentals and it is dramatically impacting where the utilities are putting their money in the build up of the grid. it's about 53% of the electricity produced with natural gas producing 13% that

by 2040, 35% of electricity will come from coal and 30% from natural gas but i would note predicting bees is highly speculative and we know there's pending rulemaking by the epa and depending on how this could have a dramatic impact on how these futures play out such a nationwide projection at and tends to gloss over the nature of the energy and electricity. some regions such as the south are much more heavily dependent and others such as new england and northwest so the implications of the fuel switch has a much different impact depending on where you live. the commission is heavily engaged in the work of assessing the changes in responding to the regional implications. for example with regards to the implications of gas electricity but commissioner miller mentioned out more electricity

generators simultaneously turned towards natural gas as a fuel source. this effort is important nationwide but it's crucial for new england wher where number of factors including geography into state policy choices have created an electricity delivery network dependent on a constrained supply of natural gas. cole has traditionally been the primary source of electricity, but today a combination of the affordable gas and impending regulations is creating a situation where there are increasing concerns about the margins in the supply adequacy as the commissioner noted as we get into that time frame it's something we are paying close attention to and i know that kennedy is as well. under any scenario it is clear gas will play a bigger role than it has in the past. you might expect the revolution

has in both liquid and natural gas production is having a tremendous impact on the work of ferc itself. it has broad oversight of economic regulations of the natural gas pipeline industry. the commission has seen a shift in the work as industry response to the burgeoning shale plate. the gas basins have seen significant investment into the basin pipeline projects that are either in service or in some part of the permitting process total now over 3400 miles of pipes delivered in 41,000, over 41,000 capacity with a total investment of over $18 billion. this large amounts of natural gas is also creating an impetus for something that was nearly unimaginable ten or 15 years ago which at th asked the export application as opposed to "terminals and this is an area of significant increase for the commission workload.

the president has export terminals and three import terminals in some phase of the permitting process and as you would expect these are major investments in the reviews are quite extensive. given the influx i believe the ferc must assess the staffing levels and priorities to meet ensure the process of these in a timely and thorough manner. in addition while the ferc has no control over federal agencies that informed the process, i would encourage them to help us by also doing what they can to be timely in their assessment work. mr. tran, that will include my testimony. i touched on a few things that i would be happy to answer any questions that you are the committee members may have. >> thank you mr. clark and all of you for your opening statement. and at this time, we would like the opportunity to ask you some questions and i would like to recognize myself for five minutes to get started.

mr. clark committee mentioned the difficulty in trying to forecast the future, and i might add that last year the epa projected that less than ten and a g dot of the nation's coal-fid generation would be retired by 2015 as a result of the utility. it's not quite 2014, and already now announcements have been made to close 50 coal-fired power plants because of the epa regulations and the low natural gas prices. in the past, we've had a lot of discussion about one of your missions on reliability. and there's been a lot of discussion about the epa and whether or not they take that into consideration and the dialogue between ferc and epa on the reliability issues. do any of you have concerns?

the plants are closing 50 gigawatts. that's a lot but they are not going to be closed for maybe another year or so. we will start with you mr. clark to address that issue briefly and then i would like you to go down the line. >> the greatest concern is indicated in a couple of times already this morning. it's probably in the midwest. they are projecting that by the 2016 timeframe they are likely to have a shortfall in where they would like to be in terms of reserve capacity. that is a projected number. they are almost certain that there's going to be a shortage of at least a little over two gigawatt so that is the concern in the midwest. from my perspective where i would like to see it go is to

maintain its independence as an independent regulatory agency with the resources that we have on the modeling efforts to provide information to all of you to all of the rest of the federal government so they can understand the implications of the different choices that may be made. >> it can be up to seven gigawatts looking at an 8.5 reserve margin. absolute way i'm concerned about that. on the same subject remember that it takes effect april 16, 2015. we will talk a lot here but it's for the plants that are going to rich wrote it. so if you have a marginal plant it's going to be shut down in roughly about 15 months so

extremely concerned mostly the midwest but we even had some issues in the shoulder season. >> ms. lafleur? >> this is an issue that we have been engaged in the past two years. commissioner moeller and i have co- formed on this issue and we have come to every single one of our meetings and discussed some of the issues, how compliance is going to ho help a supply-chain issues are going and so forth. i would say that over most of the country i think the compliance is well underway. a tremendous amount of construction work is going on. there is no question in the midwest they do a variety of factors and in addition to relying on the midwest we need

to stay closely involved. >> do you feel like the dpa is listening to you on these? >> i do because in 2011 when they put out the roles they included a consultative role for ferc if somebody needs a fifth year. not just for the retrofits but also if they need a fifth year to bring the transmission before the plan can retire. we voted a policy statement of how we would handle those. we haven't gotten them yet because it isn't far enough in the process. >> they tell us that they are listening to us a lot and sometimes we don't think they are but it may be different. >> i'm very grateful that they've come to the meetings. but something does need close vigilance. >> i was going to ask you about your priorities. i felt like the agenda was basically coincided with the administration blank energy policy but maybe you will have

an upper trinity to talk later about that. my time is expired and i would like to recognize the gentleman from california. >> thank you mr. tran. one of the things i mentioned in the opening statement is cybersecurity. and i know that it's an issue that very important to mr. waxman. it is a term in this opportunity to gather information so that we can become more reliable so that we can predict the behavior and give an opportunity to deliver renewable energy reliably and so on but it gives a tremendous amount of information about individual users. it opens up the utility companies for cyber attacks and so on. you said that commission passed cyber security standards. could you talk about that a little bit, are they mandatory standards, are they voluntary

but here a little bit about that. >> thank you very much mr. congressman. they are mandatory standards. all of the power system along with a nuclear plant are the only part of the critical infrastructure right now we adopted two weeks ago and proposed to approve. they come from the not just supercritical aspect that all elements of the bulk power system received some level of protection because as you indicated with the increasing digitization of the grid, even the smaller assets can potentially be a problem. >> they take affect in general in two years built in the process of getting ready there are standards in place now the

earlier generation and the new generation becomes mandatory on top of the standard but there are mandatory standards already in effect. >> how do you feel the process is progressing changing the old with the more secure technology. >> it is progressing up the pace of great new technology being developed and then the smart grid panel looking to make sure that the platform is the usable for all of those new technologies. that's the critical piece right now i think it's to make sure the investment of the technology is useful and provides an opportunity for efficiency and in addition to the cybersecurity standards that enable that to be a secure system. >> you mentioned that it's dependent upon a local entity.

however federal legislation established a firm timeframe held that affect the process. >> it is a large federal agency as well. sometimes that state and local. i think the key as you can put in statute timelines and change the statute in terms of our responsibilities. a lot of the times it comes down to management. and whether particularly the local office makes it a priority to deal with these type of projects that we need the input on and we have seen a wide range of responsiveness and lack of responsiveness throughout at least the federal agencies related to this. >> you don't think the legislation would change that?

>> the legislation in terms of timelines i think has positive accountability aspects. as i testified we do not force a timeline that results in a no because they will say they don't have enough time to analyze. a timeline on how they are administered will matter. >> in the wake of enron fraud crisis, congress passed the anti-market regulation authority of 2005 and recently ferc had an enforcement action against jpmorgan for the market manipulation in california and the midwest. would you comment on how that turned out? >> thank you. that is a very important part of the work. ferc has geared up a capable

unit headed by the u.s. attorney. recently, we voted out a number of cases either ordering somebody to show cause why they didn't manipulate the market or a settlement with which they acknowledged the manipulation and jpmorgan is the most prominent. most of them relate to people taking positions in the energy market to benefit something in the financial market that can cause harm to other people in the energy market. and i think that we have to continue to make sure that we are very vigilant that the markets are fair. >> this timit is time we recogne gentleman mr. barton. >> welcome to the newest ferc. it's good to have you here, ma'am and the other commissioners. i listened with interest to all of the opening statements, and i

was struck at the regulatory authority for ferc has. it is an agency that almost no one hears about coming yet it is -- its impact on the world economy is extraordinary. so it is a very important position that people have owed. of all of the stuff that you have responsibility over, there is probably no more important mission that you hold today in terms of the strategic interest in the united states than citing these lng facilities. the congress gave you the authority to make the final decision at least on the permit back in the energy policy act of 2005. at the time we did it we felt that he would be using that for the imports, more than the lng

exports. but the fact is that between you and the department of energy, you have the ability to affect strategic interest all over the world. i met last evening with some officials from the russian energy sector and they are very aware of the impact lng exports from the united states will have in markets that right now the russians dominate just as an example. i've also met with turkey, kazakhstan, some of those countries, kay tarr. it's just stunning how our ability to produce natural gas with hydraulic fracturing and the trilling enterprises that we can do it competitive impacts our ability to affect strategic

interest. my first question is under the law, ferc and the doe have joined the authority. it isn't clear how if at all it is coordinated. madam chair, is there any ad hoc protocol with the department of energy on how you review the permit process and how doe interviews the fact that it's an unnatural interest to do the exports? >> it is a very important part of our work and as commissioner clark said we have 15 substantial obligations pending. we primarily worked in our own lane to review the buyer net and safety issues of the facilities.

doe reviews the actual national interest, national security issues with the export of the commodity. so i think our staff communicates so we understand what the mutual statuses are but we don't actually to my knowledge actually collaborate on the cases. we do our work and they do our work to my knowledge. >> is there any interest at the commission's level with some congressional legislative guidance on how that process should be coordinated if at all. >> i'm not aware of any undue delays in the process although we always welcome congressional guidance if we can do it better. i know there is a representative upton blank bill that would

change i guess it is more of the other gas that would change the import export and i hesitate to comment on anything that is directed at the process. >> my time is about to expire. i am not trying to be rude at all during it i promise you that. but there is a recent decision that the department of energy rejected at least partially on applications on exporting from the terminal is a partial acceptance and denial but they stated that since the permit request that ferc was for one amount of double your natural gas that was less than what they were asking that they only approve the volume that was in the application pending for the

permit at your agency. the volumes on the level of the volume impacts the ability to finance the project. it seemed pretty troubling. and according to at least my staff reading, the department of energy doesn't have any statutory authority to even consider the proceeding under the natural gas act. can you comment on that? that's what i'm asking about the coordination protocol is any because it's obvious that they based their decision on the terms of volume approval partially on what your agency was doing. >> i think that we are dealing with the application that is before us and the dimensions of what we were asked to approve.

without reference to the fact that the application was apparently for a different amount. i would be happy to take it back and dig into it more. but i guess the question is why the company put two different amounts into two different applications. >> by time is expired. i am not casting aspersions. strategically the permitting process is something that we need to get right. >> the gentleman's time is expired. the gentleman from california mr. waxman for five minutes. >> thank you mr. chairman. chairman lafleur i know that you focused on electric reliability and grave security during your tenure on the commission, and i think that you are right to make that a priori. in my opening statement i talked about the april attack on the electric grid substation in california. and my understanding is that this was a sophisticated attack

using military weapons and real damage was done and the consequences could have been far worse. you and i discussed this incident when we met yesterday. chairman lafleur, do you agree that this was a serious sophisticated attack on the electric grid? >> absolutely. >> do you share a concern about publicly discussing details of the attack? >> yes because of the potential for the copycat attacks if too much is disclosed. >> does that ever happen in the united states before? >> i'm not aware of an incident with the same sophistication and all of the elements have certainly been sabotaged type incidents. you refer to the arkansas line and people cutting down power and things. i have heard of that but this one seemed a little unique to

me. >> before you step down as chairman, he was personally briefing officials about this attack. the fbi has agreed to brief members of the committee. would you be willing to have been briefed members of the kennedy house while? >> yes. >> chairman lafleur does ferc have the authority to issue standards to protect the grid for the cyber attacks? >> i believe to an extent because there are physical standards for the data centers so we do have some authority. >> we can direct the development of a standard than the industry develops and files it. >> does ferc have the authority to issue orders to a utility in a grave security emergency?

>> no. that's one of the things i think the legislation has that has been pending and has given either ferc emergency authority. it's lacking now in the legislation. >> you think it would be appropriate to address this in the authority? let me ask the others as well do you agree congress needs to address this gap in the authority? >> i think because of the urgent nature of some of these threats is a good discussion. >> yes, i agree. someone has to be in charge to make the decision if we are under threat. >> mr. clark? >> i concur. >> we should be working on a bipartisan basis to ensure that ferc has the ability it needs to protect from the cyber attacks and i hope that we can build a bipartisan consensus that we had in 2010 on the need for the

decided action. and i yield back the balance of my time. >> this time the gentleman from illinois mr. shimkus. >> thank you mr. chairman and and all of you for coming. a lot of issues and we will make a couple statements and we have questions as parochial to southern illinois. but the first one is coming and this is based upon your testimony and some of i colleagues. shame on us if we have rolling blackouts because it turns us back to a third world country based upon not balancing the portfolio properly. and the point is we are always going to need big baseload generation. on the nuclear cited as an attack on the nuclear power. whether it's an attack on cole. we have renewables coming in that they are not at the levels that we needed to maintain adequate supply. that's why the discussions that the chair and ended on the epa

and this discussion about reliability we really need your help on this because we cannot go down that route. we have to start talking about incentivizing the major baseload. 800 megawatts, 1600 megawatts facilities to make sure that they are still here because of the pressure that is being placed on them because of natural gas and the epa regulations. it's a reality and we all know that. i want to follow up on a train ticket information but didn't get that done in time. for the sake of clarity for my constituents in southern illinois and i'm going to make this a general question and whoever is apt to be able to answer, that would be fine.

there is a huge project that goes from the missouri border to the indiana border and comes right across the state of illinois. it's called the illinois river project. one of the major fight has been on the route as you can imagine. just for the record it's my understanding that the route approval is something done with the state specifically about commerce committee and not a ferc matter; is that correct? it's going to get a lot of constituents off my back. that's why i am asking these questions. a second concern has been over the return on the equity provisions that we will receive for the project. some are questioning the 12.83% and want to know why they received that percentage regardless of how the project is conducted. am i correct that the return on equity is from the transmission owners agreement that was

approved by ferc in 2003. >> we have jurisdiction over the return on equity. >> and the return of equity would be applicable to all transmission owners in the region int and their projects nt unique to the illinois river project; is that correct? >> last, there was a proceeding pending to reevaluate the return on equity where interested parties were able to set that comments on the 12.3% on the return rate. can you tell me where that stands and what the process is for reviewing and making a determination on that complaint? >> i'm hesitant to comment on the opening buckets before us, but i think you have my commitment and i suspect those of my colleagues for the cases that are read before us a very high purity because we know that

they are important, and there are several transition cases pending before us that housed the reference are very important to the company's and the transition grid. >> the citizens are getting no benefit. if they pass through because the renewable portfolio standards and states it striking to wielding green power. that really needs to be part of the consideration to understand that as these fights go on in the sighting, there is no benefit to the folks at southern illinois. let me end -- i also want to end on this issue of the port because it's democracy in eastern europe and they are

critical for the allies. they use energy as leveraging the power so i agree with the chairman emeritus it's not just a critical issue for us. it's a critical issue for peace by doctor c. for our allies in nato and i hope that you can keep that in consideration. i yield back my time. >> i recognize the gentleman for texas for five minutes. >> thank you mr. chairman. first of all i'm from texas and i have a district in houston and i tell people i was born there but i've never not lived near a pipeline near east and. for crude oil, natural gas, liquid, you name it. it's a part of our life and in

our committee * action every few years in the pipeline safety. we passed a good pipeline safety bill in the last congress we will find technology approved and we can find another reauthorization with additional standards that will make them even safer. in your testimony is to get approximately 75% of the daily consumption is covered by the north american resources. you also state that we are more secure than we have been in decades. with a viable north american energy market further our security interest? >> infrastructure generally helps afford our energy security future. with regards to the 75% figure that was in reference to the liquid product that we have 75% covered from north america and on the natural gas sighted off the chart. it its way over 90%.

>> the export of natural gas would promote national economic policy and stimulate the flow of goods and services. what experiences would allow ferc to make such a declaration? >> again the bill that you are referencing is 3300. >> this is state of the export of natural gas with economic policy and to stimulate the flow of goods and services. i was asking what experience it has to show that. >> ferc blank abilities p6. >> the ability to decide infrastructure is clearly critical to the nation's energy security future and to our national interest. >> what you agreed the statement of the promotion of the strong economic policies within ferc blank decision-making purview? >> to the degree that it's

authorized by statute. >> additional expertise to coordinate and make sound and reliable decisions relating to the u.s. interest? >> generally speaking i believe so, yes. >> in a side note a number of us went to mexico the friday before thanksgiving and one of the things that was highlighted in the discussion with the members was the reason decision on the pipeline from texas natural gas pipeline in northern mexico because they don't have a lot of resources but not enough production. my concern is that if that was no problem at all we may be selling or providing natural gas to mexico but 20 or 30 years from now, we may need to be importing it from mexico just because of our infrastructure that we are building up because the natural gas, downstream chemical, you name it come in manufacturing. but that was a big win when we were with our neighbors in

mexico. so i appreciate that on the cross-border pipelines which brings me up to the hr 3301. the north american energy infrastructure staff raised concerns regarding whether the legislation would prohibit ferc from fully complying with section three and section seven of the natural gas act. if we were to amend to state that nothing in the 3301 would affect the need to comply with the natural gas act do you agree they would no longer have concern with the legislation? i think you've identified the report. i think with an amendment i've seen in the discussion draft i would be comfortable operating under the new law with respect to natural gas imports and exports. the other part of the act are beyond us. >> other agencies are able to deal with those.

commissioner moeller coming you stated that he sessions he would be approved and that many delays are by the lack of timeliness from other agencies. can you provide a little more explanation on that obviously state agencies we don't have a lot of oversight on but other federal agencies is that the laying ferc providing the turnaround time? >> we can give you specific examples later if you want them but it kind of goes back to the point i made earlier there is a lot of regional differences. if the management regionally makes the priority, it happens. if they don't, they can drag their feet. >> there is concern about the reliability issues and a number of us have made attempts to resolve an issue because the department of energy says that you can do something with a power plant, but on the grid

reliability conflict act i would hope that would help in texas with reliability issues. thank you for your courtesy. >> the time has expired. >> the concept of the beneficiary pay is at the heart of the way the transition system operates in the science cost and i'm concerned that under order 1,000, ferc is defining the benefits so broadly into spreading the cost so wisely that the simple action has no meaning anymore. chairwoman lafleur, please explain the idea of the beneficiary pay and what that should mean and keep in mind i don't want my constituents.

i know you can't address the merits of the individual complaints filings under the 1,000 but there is a leave of the point i would like to raise with you that i think stands on its own which i hope you will be able to respond. >> thank you congressman. the order 1,000 required to plan cooperatively across the region as the region encompassing pennsylvania already does. and take into account three kinds of benefits. reliability benefits, which can be hard to quantify that are very real, the needing public policy requirements to connect to resources that the states require them to connect which are normally identified by the states such as pennsylvania which is a renewable portfolio standard, and a third congestion benefits to reduce the cost of power by building more transmission. the order required the region to take them into account in

assigning the cost, and i think the region pennsylvania is a part of it is a good example of coming up with a hybrid proposal that use different kind of cost of occasions for different kinds of benefits that i think is we approved in the first case. >> do you think ferc has authority under the federal power act to locate cost to the entities that do not have a customer or contractual relationship to the daughter of the line tha but need the capacy provided by the line? >> i think that under the court decisions worker there has to be a proportionality between the benefits and cost but not necessarily line by line. there can be a portfolio that the region agrees to that some benefit here and if the region

agrees to it than we assume they've negotiated and that they all get something. >> can you show me what section they give this to allocate the cost in the absence of a contractual relationship? >> we are relying on the sections that require just reasonable and nondiscriminatory thinking that a process where the states involved and the companies involved negotiate the cost will help ensure the reasonable transition rates. >> on the specific ferc order 1,000 compliance filing orders you've raised serious concerns about the potential downside of the commission's implementation. can you elaborate on these concerns with implications for consumers? it's prudent for the utilities to do so.

with regards to the cost allocation issues and that is helpful and where i have disagreed with the majority of the commission from time to time is with regards to how ferc has been understanding and allowing. at the state and local law they have to comply with because they have a federal system where they still have substantial compliance laws and we need to get morgive more latitude for te utilities that we regulate and continue to understand and comply with and give them the flexibility to take into consideration the state and local and not use 1,000 as an attempt to shake up the jurisdictional box that leads to greater litigation. >> under order 1,000 but

predicated on the idea. >> how does the order solved the problem and how will we know when it is being built? well but utilities kill us -- tell us? >> it will take a little bit different shape and region indicated is highly reachable by nature and in some regions like the midwest you have a renewable standards and in other parts you have regional utilities and states coming together and talking about some of those issues and other regions like the southeast, you have a much different situation you don't have access to the renewables and you have a different structure in those states. i just believe they have to be

open to understanding the differences in accommodating those. >> at this time we recognize the gentleman from new york for five minutes. >> thank you, mr. chair. you know t noted that improvemet between the years 2011 and 2012 in the number of minor weather-related covemayanweathem transmission related outages come as you know we have several other related issues that can country due to the reliability problems. older or transmission lines and equipment that needs to be upgraded or replaced and increased in severe weather events that i have seen in my district and throughout new york that can call outages. in addition, we have much more reliance on the it in general for everything from financial transactions to research and benefactor in the things that require reliable coverage of liberty. how are these changes in the

nature of the demand for power, the increased frequency and intensity of storm related disruptions being considered in the reliability efforts? >> there's at least two different parts of it. one is the reliability standards to make sure that the asset owners have the accountability or the refurbishment of their lines so that they operate properly in order to meet the standards but second, we were talking about the order 1,000 transition planning in a reference was made. that was all a part of making sure the structures were in place so that companies can invest in the money that they needed to replace the aging infrastructure and as you know i am familiar with the age of resources in your region. it was an early part of the country to electrify.

>> they threaten the long serving entities to solve supply their own capacity resources to support their own loads. this problem is particularly for the publicly owned and cooperatively owned electric utilities because it endangers their ability to finance the new generation units to serve their customer base using the traditional business model that relies on the long-term contracts and lower cost. the utilities would be able to successfully exercise the market power and capacity markets. >> is a question that is being looked at in the ongoing capacity market inquiry that is open right now with a heavy purchase a patient of public power but basically the capacity markets have a forward process

that is used to assign with the generators will get paid for being there. if people are allowed to bid in with a subsidized rate that it doesn't refer to the market it could affect everyone's reliability. but they always have the right to prove that the costs are lower and they show the iso they can do it more cheaply. >> you describe the man describy changes that are simultaneously occurring throughout the country as a power production use and to deliver the landscape. particularly interested in the challenge that our success with energy efficiency, demand management and renewables are presenting to the traditional economic models for utilities. the demand management is a good story for the companies to increase profits by selling less of their major product.

so how are we going to provide a continued incentive to seek more efficiencies and better management of demand if the goals further erode the utilities ability to earn profits? >> well, congressman a lot of those determinations are made at the retail regulation. what we have been doing it ferc is make sure there is access to the markets for different technologies that enable the response and energy efficiency. you see it in the market in the demand response capability for that in the marketplace. the different regions in the country are looking at ways to develop better demand response and more demand response. i presume that it will be part of the package as they look at the potential capacity shortfall in 2016 and beyond.

so what we're doing is trying to make sure that there is that demand response gets treated fairly in the marketplace. as the reward for the investors in the technology seems like a major restructuring of the power sector over time. >> the restructuring of the power sector over time. >> i think it's happening right now. you have a lot more people engaged historically it's been the central station power by the utility and the leopard to the homes and business and now the consumers want to be engaged in their own production and more engaged in their usage. the development of the technologies and is margaret are enabling the consumers to do that and the traditional utility and power sector is having to respond much like what happened in the telecom sector amount that it's bringing great efficiencies to the utilization. >> is a gentle man stein has expired. the gentleman from ohio for five minutes. >> thank you mr. chair and i

think the commissioner for being with us today. i appreciate your testimony. excuse me. if i could start with chairwoman lafleur. under the former chairman welling, it included a smart grid response integration of renewables and order 1,000 transition planning consultati consultation. do you see that you would be continuing on with the former chairman blank goals? do you agree with those or disagree? what do you think of directing the commission? >> it's a timely question because i'm just in the process of talking to each of my colleagues since it has been about a week that i've been in the job to set the consensus of objectives going forward. but i see that reliability and

security all continue to be a top priority and that includes resource adequacy because you need the resources to be reliable, which we talked about a lot this morning. we have a lot more work to do when transmission, so order 1,000 as i believe commissioner moeller said it's going to be a big part of the work for a while as well as the transmission rates and making sure the markets are fair and that they attract the investment the country needs and that the infrastructure is there are the four priorities. but i think that it is to be refined as we continue forward. but those are things that are ongoing. >> if i could, just a couple of areas. natural gas pipeline permitting, would that be on your priority list? >> i think i referred to that in general in the term infrastructure. but i think that in general can't project group does a good

job handling the pipeline applications in a timely fashion. we see a lot of them especially in the stations in the merciless and we need to continue to handle them. we have about 92% a year and we can continue to do so. >> on the pipeline permitting its importance across the midwest especially as you said on the merciless and ohio. one of the great things we have is natural gas that one of the problems we are having is we don't have the ability to get a natural gas where it needs to be. in ohio with the chemical industry at the same time to have that gas cracked and be able to utilize it on the pipeline that's very important. also, what about on the organized wholesale electricity markets what do you see on that? >> all the things we've been talking about today, the power supply changing we have seen a lot of changes in the markets to

adapt to the new resources and make sure that resources are there when the customers need them. we are focusing on the capacity markets and i do not think that that is going to change in terms of the level of cases and things we need to look at. >> one last question what are the measures to determine whether the restructured electricity markets operated by the regional transmission organizations are benefiting consumers? >> that is a big question and certainly rel reliability is thy but also looking at the cost over time it is difficult to conquer the cost of the restructured market in the places that did in three structure because the places that did were the high cost places to begin with and that's why they were structured. looking at the cost and reliability are the two big ones.

>> commissioner moeller, does ferc have generation or transmission activities and the non- jurisdictional entities? >> not that i am aware of. >> i just want to make sure on that. and also, with my remaining 40 seconds, mr. commissioner clark. in title vii, congress required a ferc and the cftc to enter into a memorandum of understanding to establish procedures for resolving jurisdictional conflicts over energy derivatives. what needs to be done to resolve the conflict between the agencies and provide industry research and he did it needs? >> ferc blank position, congressman, is that both agencies should be able to share the information that we have so that we can do whatever the congress has intended us to do. whatever reason that predate my term on the commission that

hasn't happened we have leadership changes in both commissions and i am hopeful thethere can be a way that theyn strike that. >> my time is expired. >> we recognize the gentle lady from florida for five bits. >> good morning. i think that you are all serving on the federal energy regulatory commission at a very exciting time. this is a remarkable time in the natural gas revolution that comes at an important time when we have got to -- we see the natural gas plant when we know that it's vital to reduce the carbon pollution and add on top of that although the innovation and the smart grid, demand management and renewables. while all of that changed is

occurring, the responsibilities remain very important to assure that consumers are protected and that you are charged with enforcing fair competition in the electric and natural gas market. you have to maintain your important relationships with state and regional partners for the necessary energy infrastructure gets constructed. it's almost outdated now wil thd utility model selling as many kilowatt hours as possible what we know about smart grids and energy efficiency we've got to be able to do some things and some states are doing it. we keep an eye on our infrastructure reliability.

i think what you all have been doing to ensure that the renewables compete on a level playing field is very important and also that energy efficiency and demand side management are treated fairly if they compete with the power generation. ferc itself had to sa said thaty recognized the demand response can help produce the price utility and mitigate market power and enhance reliability. the recent staff was able to comment on it. madam chair could you comment on that recent staff report by the findings and what else ferc is going to be giving to channel the great innovation across the country? >> it's something we do under the policy act and the demand response around the country. our primary focus is on the wholesale market. two years ago we may have had a significant case on how you compensate for the demand response in the energy market.

right now there's a lot of issues pending without you compensate the demand response in the market and i think we will continue to fund those as the inquiry. i think that to unbundle the rates and incentivize the efficiency is that the state level and i know you're commissioner is going to be the president soon and i think that's where a lot of the innovation is still coming in the regional markets. >> it seems some states are so far behind and we could do a much better job and people are really waking up to the fact that young people now expect to be able to use their smartphone to turn on their thermostat. commissioner you mentioned in her testimony that you have had conversations with a number of utility ceos about their electricity generation plants for the future. you said virtually all you talked to said they were focused

on increasing natural gas and renewable energy generation. is that right? and why do you think they are recognizing waking up to the fact that it's natural gas and renewable that further future? >> combination. incentives for the renewables and state renewables. one of the biggest factors is just to the uncertainty of the investment in the coal-fired generation because as i said in my written testimony, those ceos it's when the legislation will occur and the likelihood that it will occur at some point with the new coal plant in the

country. >> the science and the economics as well that tell us we have to reduce the carbon pollution into the economics telling us the same thing. the state of florida where the taxpayers have to invest and/or already investing huge sums of money to be able to adapt to the changing climate. think about the huge bills that come due every time we have an extreme weather events whether it is drought or super storms. i would think that the utility industry sees the writing on the wall looking for that certainty and at the more aggressive we are moving on the carbon intensive energy generation, the better. >> this time i recognize the gentleman from west virginia mr. mckinley for five minutes. >> chairman lafleur, perhaps you can give me some direction on this. we have a growing problem in

west virginia with the various constituents. currently a lot of it is just wasted which is a shame and it doesn't benefit the consumer and doesn't help the environment. so my question is what i am hearing or sensing and it isn't just for west virginia in this exploration of the marsalis and number of states it seems to be a potential jurisdictional problem starting to flare up a little bit and one of them is should we be treating the ngo thereby allowing the federal government to take care of that

or should we continue having them handle this at the state level? do you have a position on that? >> i haven't thought of the jurisdictional question. it's a good thing for the committee to be looking at. there is a lot of stranded gas capacity as well as gas that is being flared because there isn't sufficient take away capacity for the liquids. the only do the pricing for the liquids pipeline under the interstate commerce act, but we don't do this writing. i suspect some of the sites would not welcome federal fighting. i think that we could do it well because we do it well with gas pipelines. but it might not be as popular with some of the states involved. but i think we have done a good job with it. >> whether or not are you going to take a more -- what does states continue or are you going to try to assert the role that

otherwise is not expected to? >> i didn't have a plan to redefine the natural gas under the act i think it is something to think about. >> could you provide us in writing with the time frame as you said you were not prepared to discuss that could you provide some rationale for the government to be involved in this? >> we will certainly take that. >> of the lasthe last is maybe e generic but for over ten years as an engineer in private practice we were concerned about the electric magnetic pulse and i've been hearing about it for well over a decade but certainly people have been talking even more in the last three years.

are we waiting for some catastrophic event could happen because there is a lot of talk but no action. >> i mentioned in my written testimony and briefly in my verbal testimony that last year the commission voted april requiring utilities to have operational plans and response plans. >> what's your expectation? >> the geomagnetic disturbance and we have one pending will help somewhat with the pulse. there is also voluntary efforts going on in the north american transmission form to talk about other aspects but i think the standards are the most tangible action that's gone on in this area for a long time. >> is not unique to us in the united states. >> is there progress being made

in other countries and dealing with them? >> it's variable. a lot of progress is being made in scandinavia, south africa and the united kingdom. a lot of other countries have take in a wait and see approach and israel is doing a lot and taking a more wait and see approach. >> the gentleman yield back the balance of his time from colorado for five minutes. for the acting chairman to of following a brief conversation. and it was an intriguing question raised. in colorado i think just a couple of years ago we had the hyde park fire. it followed a week later by beth

canyon fire that he can do most devastating natural disaster this year from the black forest fire. do you believe it threatens the greater reliability? >> i recall being involved in that issue because we looked at the forest service after talking to colorado officials including democratic state senator that works for the keystone foundation just very concerned about the amount and its threat from a fire perspective that is the nexus deterred. so yes it comes from the state of washington and is the biggest issue up there and particularly with the beetle issue. i guess that is a mixed question that it would be nice if the threat to reliability can be

removed. >> for the acting chairman and lafleur or moeller. we passed to the regulatory efficiency act of that revises how to regulate a small hydro projects required to investigate the projects and conduct pilot project. can you give an update to implement these endless provisions, what other provisions of the law outline the steps they will take to implement? >> we have already received in large numbers of exemption for conduits. i believe they are in some stage of the process. a couple of them have been approved in the couple are close to approval. >> would you mind giving the idea of the 18 and which ones have been approved? >> we can take that as a write-in question and where they are in the process.

also, i believe it was october 22 we held a conference on what we can do to help speed up the process in the two-year licensing requirement. the comments are outstanding right now and the folks in the hydro section are working on that and had a lot of the other agencies involved that contribute to the timing as well. we received fewer applications for other parts as of yet in the 40-megawatt exemption. >> will be able to implement the project in 2014? >> yes. >> you talked about the workshops and what you learned. do you belief we will be able to get through the legislation in the next two years if we implement the legislation? >> i certainly think that our job.

>> the process for excluding from the license, how is that working? >> it's working actually very well with your state because the memorandum of understanding and we recently entered into one with california just a couple of weeks ago. it's variable in different regions because some of the states don't have the resources to have the same level of cooperation but it's something that we put a lot of effort in into. they try to process them as quickly as we can. >> those granted and denied it would be great. if you can provide a statistic on the lengthy proceedings -- >> yes. >> commissioner moeller,

commissioner clark a question for you and i'm running out of time. should the behind the meter generation be treated as a demand response or generation resource? >> i have issues with behind the meter generation because it's not dispatch full like other forms in bible point you to a dissent i wrote earlier this week on a particular order. >> commissioner and then i will follow on the record with some of these other questions. >> congressman, to a greater degree it relates to those cases and would have some concern in some areas and others i than ote measurement of verification can be proven ideally they would be able to participate should be given to those resources in from time to time i disagreed with parts of the commission's orders on that issue.

>> the gentle man's time has expired and recognize the gentleman from california for five minutes. >> thank you mr. chairman. appreciate that. mr. norris earlier you were speaking with ms. castor and you were talking about people worried about building coal-fired power plants because of legislation. can you expand on that for the? >> i think there's a general concern that there will be at some point in time a cost put on carbon. because the uncertainty of when that will happen and what that will be combined with the other factors doctor testimony in the natural gas prices, the epa rules, state requirements it's too risky for the investment and frankly new clear is suffering the same problems on the cost aspect.

>> while natural gas as it concern about looking forward mac chuckled and gas -- natural and gas have competed with existing in the new proposed regulations and the fear that either legislation or additional epa regulation is a major cost as to why no one is looking at building a new coal-fired power plant. is that a fair statement is generally what you said clerks. >> some of the existing facilities are being retired that the primary concern expressed to me is the anticipation at some point there will be a cost on carbon into that make the economics difficult to finance the plant. >> would be asked to anyone that wishes to answer for all of you.

have you done a study to determine whether those markets have lowered the cost coming to the consumer? >> we get regular reports in the market monitors. the years are running together but in the recent past, we compiled a major set of metrics from the different that include customer tricks over time and there were in the pjm cost reductions and now they are in part driven by the cost reductions and gas being used to generate electricity but we also looked at the congestion and how that was coming down so we could provide an update on it in written form as well. >> have any of you had contact with the white house regarding the president's climate action plan?

>> not me. >> i don't believe so. no. isn't that interesting. so they didn't talk to you about that? i guess they didn't talk about it, nothing else you can say about it i suppose. >> we function as an independent agency. they don't give us policy guidance. at least not in my experience. they did call to ask me to be acting chairman which i did appreciate that they didn't say how to vote on anything. >> i wasn't really asking whether or not they had called you on how to vote on things but i'm curious they came out with a major plan and they didn't discuss it with you to get advice or seek input so you didn't have those conversations either. maybe i wasn't clear when i asked it the first time around. >> i do coordinate on the electricity advisory committee but their efforts are more

around transmission storage and other areas. it came from other parts of the administration. >> so it would be fair to say they didn't seek any information on how this might affect electric prices for the average american family? >> the white house didn't seek any information for me -- from me. >> they didn't know they exist existed. >> i don't have any additional questions. thank you for being here today. without i yield back. >> the gentleman from illinois. >> the markets tend to be the most efficient of the regulatory approach towards the rules and regulations in place given that the process is put in place by

ferc impact tens of millions of consumers it's my hope the commission will work with all parties to ensure that all aspects are taken into account to ensure that the current and future energy demands are able to be met. it's my understanding ferc is in the process of evaluating market mechanisms in a holistic fashion and subset of the capacity markets. i have a few conditions i would like to discuss in terms of where this effort may lead and whether or not it may be unnecessarily limited. chairman lafleur, what do you intend to do with the information currently gathering in this proceeding? >> i think on the capacity markets, that is a work in progress that's going on right now. but i think that potentially and illustrative example is what we've done on gas electric.

here's a large set that have to be handled regionally and continue to deal with each region in the country but here's a couple cut across issues we may look out across more than one region and that may well be the future of the capacity markets. but i want to read the comments and talk to my colleagues. >> have you discussed the possibility to include other wholesale capacity markets the commission regulates. >> they operate in largely parallel fashion, they are more mature, the voluntary capacity markets is considerably newer and we thought it might be difficult to do them all in one day there is no reason we won't be looking at other places if it doesn't arise. >> on the generating the fourth

capacity markets and organized electricity markets typically operate three years ahead. lafleur and sp10 let me ask you this do you agree there's a fundamental mismatch between the investment recovery profile of electric generating assets and the way the market marchant are structured and do you believe ferc has a role to play in addressing this problem? mr. norris first. >> the marketing, yeah there is a disconnect. the capacity markets were really designed to make sure there's adequate resources into the reserved margin for the long-term future. i think on the current capacity constructs. we are largely put in place to provide a revenue stream for generators to respond in the restructuring areas. there's been a cushion of time for that to play out. we've reached the end of that cushion now. we play a role in structuring them so long-term supply is available.

>> chairman, do you have anything to add on that? >> we are looking at the capacity markets to see if they attract the investment we need, and that includes, you know, baseload, intermediate demand response, all the things you need to come a grid, and that is what we will be looking at. >> does the commission have plans to review market rules so they are given a proper signals to allow for investment decisions to be made into? >> it is in part to attract the investment for the reliability so that's very much in the responsibility. >> do you think the federal power act authorizes ferc to authorize the transmission of remote wind power over the potentially renewables? >> i don't think it authorizes the commission to subsidize such lines. it makes a reasonable attempt at

allocating the cost on a commensurate basis on the principle i think the seventh circuit through the course of a couple of major cases has given us the goalpost in terms of what our responsibilities are in signing those costs. >> thank you all for your time and i will yell back 36 seconds. >> the gentleman from texas for five minutes. >> mr. tran, thank you. i ask questions touched on earlier i was in another committee we are all trying to pass everything we can before going home for christmas. i've been hearing about a new technology coming onto the market and i'm from texas and of course everybody's interested. it's the most important word in the dictionary for young people and they have no jobs today and if we keep going the way we are going out there will be no employers in each year or so.

you have a very important job. to manufacture the solution out of gas liquids to make it easy to transport to a customer who's increased i and then can use it. it's a new technology that can be used relatively small and equipment that is modular and can be moved from side to side which is important to capture where they can be installed in the existing port facilities. i hope that ferc can ensure that technologies that are not subjected at the same time consuming expensive review process is a major projects such as the lng. they don't always fit the rules that you have and they are forced to fit into a category but just because you are

supposed to regulate them or you feel you have to regulate them, then the benefit will be off the ground. i hope you don't feel you have to conjure up ways if we haven't been regulated by the act of congress and that is kind of a question that's not meant to be in anywa any way because i admi. do you have any short statements that you want to make to what i've said so far? >> we have to stay in our jurisdiction. we have been given quite a lot of it. we are not sure of what to do and that's what we try to do is follow the law. >> i agree with the chairman lafleur. coming from north dakota where we have a significant concern and i understand -- i understand the technology that you're talking about but anything we can do to advance technology to

capture and utilize resources. >> we go back some 25 years and some of us have been up here and if you remember we passed the clean air act and took several sessions to doing them. >> even though i was a texan and energy paid 55 or 60% of the taxes that were paid in texas, we felt that it was a very important and we breathe life into the epa by giving them a role in that act. i'm kind of sorry now that we did because they acted well and we were pleased with what they did and we thought that even though they were energy oriented, that the energy people needed some supervision. but they also needed some help for the federal government couldn't give, so they her

despite overregulation and that's what i was asking about i guess. chairwoman, the key goal in the ferc strategic plan, 2009 to 2014 g-golf are the safe, reliable and efficient infrastructure development to integrate the new resources. are you supportive of ferc -- you've been there for three weeks, you said? >> i've been at this job for two weeks. >> you have done it very well. thank you for the answers you've given. are you supportive of ferc blank bill included in this plan? >> yes, i am. it's important -- >> what changes would you consider on this bill? do you have any changes that you would make? ..

what negative consequences would you expect? >> we just have to watch for liability very, very closely. a number of us have made references to the midwest but it's not just the midwest in the next few years. the next few summers, very concerned about making we have resource adequacy.

>> and acting -- is my time up? >> i'm sorry, mr. hall. >> i guess i will yield back them. [laughter] >> we were also mesmerized by her comments that i forgot the time, too, and let you -- at the moment to recognize the gentleman from nebraska, for five minutes a thank you, mr. chairman, and on your favorite witness, the last. mr. norris, i want to follow up with you because part of the discussion today has been about a carbon price being built in that perhaps the carbon price is based on the uncertainty of what's going to happen regarding carbon, but that -- that interest me what you're talking about. because yesterday i was hit up by reporter that asked me a similar question about energy companies already starting to build in a carbon price.

and, of course, the question then from the reporter is, what are you guys doing in congress about a carbon price? and i said, nothing. we are trying to artificially inflate, at least legislatively, energy prices, nor through a tax. so it begs the question since there's a lot of discussion about now building in a carbon price, is there discussions in ferc that you've been involved with or know about as an overt attempt to do the race prices based on carbon -- raise prices -- or anything of the things that would in essence increased costs based on carbon? >> in short, no. the reason for my comment in my testimony today is to make you

aware i think of a major factor of some of the change happening in our landscape right now is the uncertainty about when or if it would be a price on carbon. >> well, and i think there's some merit to the if because there are a lot of people who are pushing that. there's no legislative attempt. but it also begs the next level of question on with natural gas, particularly, you just had some discussions about north dakota. i have pictures on my iphone of that when our subcommittee took the trip up there. so we are burning it off. we've got an ample supply, but i think there's uncertainty in that area as well based on some environmental groups and even some people on this committee that would like us to stop using the technology of hydrofrack shrink. have any of you had discussions in there about -- hydrofracking. the impact of any policy impact

on hydrofracking, how that could impact the reliability and affordability of electrical generation in the united states? and i'll do -- let's start with the acting chairwoman and congratulations, that is a call from the white house. i'm just looking for any call from the white house on any of the issues i've asked them to document, but that's an issue for a different day. >> we don't regulate hydraulic fracking, so we've been asked in some of our gas pipeline cases to evaluate the environmental impact up stream and downstream, and we taken a pretty strong line under the national environmental policy act, jessica the impact of the project we are certificate. i think as part of the discussion of fuel diversity and gas electric, there's a general

discussion of should the rules change anytime on natural gas, you know, we have to be alert to that because that will affect the liability, but no direct impact. >> one of the discussions we have had with ferc in the past has been coordination with ferc, particularly on natural gas with the other entity, the epa for example, reliability. how is that work -- everyone trying to get on the same page in regard to natural gas? chairwoman? >> as part of our -- most of the discussions i've been present with on the epa have been about specific sweeps th of legislatin we discussed, maps and so forth. i stay alert to discussion of regulation, natural gas, but i have not been part of discussion of fracking stairwell, no, this is on natural gas in general and reliability because there is going to be initiate as some of

these plants are unable to use coal because of the new standards that are being produced. there will be a time when the either shut down or move to natural gas. that's going to affect liability, and i assume those discussions are occurring with the epa and other agencies so that you know that this is going to happen. and how you're going to deal with it. >> well, should there be a time when i have any reason to believe the natural gas supplies going to be interrupted i would certainly take part in those discussions. everything we are seeing -- >> this will be more about the downtime of plants, either shut down or shut down to retrofit. because you can't got a coal power fired plant and habit still running while you're putting in a whole new system speed well, i'm that we have had discussions and i think that's one of the reasons that the epa gave us, among others, a

consultative role is a plant needs more times to retrofit under the mat standard. even if you give them more time to retrofit, there will be downtime during the retrofit. so going to issues of electrical generation not existing in certain areas. >> the gentleman's time has expired. i'm very sorry to say, you're not going to be the last person to ask questions. [inaudible] >> mr. chairman? may i make an inquiry a few? i didn't get asked everything i wanted to, but i did know what had already been asked. what you asked to leave the record over a couple of weeks if we may direct questions? >> absolutely. yeah, we will have -- >> about the natural gas sector and electricity sector that no one -- thank you, mr. chairman. >> we'll have it open for 10 days and work with you to get the questions to the commissioners. so at this time recognize the gentleman from new york, mr. engel, for five minutes.

>> thank you, mr. chairman. and i won't take five minutes. i was here before and i had to run out. i just really have one question. i'd like to focus on the champlain hudson our express. i'm sure you're aware that i and others have spent many years speaking out in favor of closing the indian point nuclear power plant in new york. i'm not opposed to nuclear power and i never spoke a word about closing the plant until after september 11 when h i learned tt one of the planes that hit the towers flew right over this power plant, which is probably about 10 miles out of my district. i believe, and so does our governor and all the elected officials in the surrounding area, members of congress who represent the air in westchester county we believe it presents one of the most environmental threats facing the new york metropolitan region.

but new york is no longer really need to face this threat because the champlain hudson power express would deliver 1000 megawatts and our to the new york metropolitan region. and with the implication of the champlain hudson power express, security of new york's electric grid would be increased and new yorkers will have to live with the danger of -- in their own backyard. it's obviously a benefit to new york and the city of new york as obviously as was our concern. and given the great benefits of the project i really believe that it's important that it is implemented in a timely manner. so my only question is really in our effort to plan for a post-indian point new york, i'm sure that we have to make sure that we have sufficiently reliable, safe energy to replace the nuclear facility here because when some of us said that it should be closed, people came back with well, what are you going to do to replace it?

i believe the champlain hudson power express line provides a portion of that and i would like to hear from any of you regarding the status of the project. madam chair. >> thank you, mr. congressman. i believe about a year ago within the past year, ferc issued an order a pretty market-based rates for the champlain hudson power express line. no one sought rehearing of that order so its final so we did the rate making. i believe the citing of the line is being done in new york state, as i don't think with anything open on the line right now but we got out of the order they needed for their rates. >> thank you. does anybody else have anything? >> i think it points to the fact the transmission is such a good technology because it can solve a multitude of challenges going forward. and so, i again want to stay positive on the need for more transmission investment. this is a local example that has

regional benefits. we can duplicate that in many areas of the country. >> thanks for the question. yes, i ago my colleagues comments. -- i ago my colleagues comments. it's a great example of the wealth of abundance or abundance of possibilities coming down from canada that could meet a lot of our long-term needs with low emissions, no emissions but also transmission will be key to the second point would be as you talk about your nuclear facility, i'm very sensitive to the decisions of new yorkers about, about that plant. we're also facing a close down of a plant in california. just a heads up. replacing those large facilities in huge urban centers will require some other infrastructure to replace it. so we're going to need support, and developers will need support

for building an infrastructure to replace those generation facilities. that's not easy to do in today's environment. >> i would concur with my colleagues and don't have anything to add. >> thank you all very much. i appreciate the interest. thank you, mr. chairman. >> i might want to make one comment to refer to the closing of the nuclear plant in southern california and california's a 33% renewable mandate. i was talking to one of the ceos of one of the major utilities out there, and as they build a new transmission line to bring in renewable power to where they need it, they are getting in some instances specific instructions relating -- going underground on the transmission lines which raises a lot of technical issues. as this ceo informed me that the mileage that they're going underground is costing his utility $100 million a mile. so you know, we're talking about

some costly situations in some cases. at this time recognize the gentleman from texas, mr. olson, for five minutes. >> i thank the chair and i thank you for your patience. i can assure you that i will take only a maximum of four hours and four minutes and 59 seconds of my time. welcome to the witnesses. the chairwoman the floor, comissioner moeller, commissioner norris, happy holidays. i have one question. it's about the production tax credit. start with you, comissioner moeller. as you know, for the next 10 years some wind turbine owners will get tax credits for every hour they run. this tax credit was designed to kickstart renewables. and yet, it lives on despite wind up being a major part of the great. at least 12% in my home state of

texas capacity coming from wind. but some markets have seen quoted in quote prices as though negative $41. per megawatt hour as operators get the credit and run whether power is needed or not. now granted, that's an extreme example but they can sell for a loss and taxpayers make them whole. that moves markets. back home our lack of new power construction in texas, our public utility commissioner, chairwoman nelson have said, this is a quote, the market distortions caused by renewable energy incentives are one of the primary causes, the distortion makes it difficult for other generation text recover the costs and discourages investment in new generation. and while the ptc isn't the only driver of market distortions, it

is a significant force. so start with you, comissioner moeller, do you agree incentives for renewables distort markets? >> congressman, i think all subsidies distort markets. >> chairwoman lafleur, any comment? >> in a pure market there would be no tax subsidies but many of the resources that enter the market have tax subsidies of one sort or another that are not taken into account in the market price. >> i would echo the comments. any tax implications will affect an open marketplace. having said that, i am concerned that some the nuclear facilities that have been closing or looking at retiring because of negative nighttime pricing is a concern to me because of long-term facility.

>> and commissioner clark, last commentor. >> i would agree, and for the reasons you have identified, obviously it's a decision for congress to make whether there will be a cdc or not, not ferc buckler does have a market disporting impact especially in very wind rich parts of the country. and at certain times of day and at certain times of the year. >> one final question. following up on my colleagues question about our grid liability. yes or no, disabling other still a great bad policy to trap companies between two different regulators with different goals during power crisis? chairwoman lafleur. >> yes. i think it's bad policy and i supported -- you're talking -- i supported the basic principle

that if the d.o.e. orders you to run to you should not face sanctions for that, and that limited instance. >> strongly, stronglstrongly ste concept, especially with what we're hearing about in the midwest and some extent texas. >> yes, sir. mr. norris? >> i think it puts people in an unfair position. >> i would concur and i've been supported of the past -- >> thank you and i yield back the balance of my 41 seconds early. >> thank you very much. we appreciate that. well, that concludes today's hearing. i would like to ask ms. lafleur one additional question. recently, i was brought -- it was brought to my attention that ferc has jurisdiction over number of lakes around the country in which hydropower is being produced. and a decision affecting like in

the ozarks and about tearing down some houses and whatever, and then the grand lake in oklahoma, would you be able to identify for the committee the name of an individual at ferc that would have up-to-date information on the authority and jurisdiction that you all have over these lakes in which hydropower is being produced? >> yes spent not right now but later. >> yes, absolutely. >> thank you. and without objection, and hopefully you all have seen this, we have a letter from the american public power association, a statement it would like to insert into the record. without objection. so that's entered and we will keep the record open for 10 days because as mr. hall and others have said there's a few additional questions we like to submit to you all. i want to thank you for coming up today in visiting with us, and for the exchange that we had, and thank all of you for what you're doing and continue

to do in addressing these important issues. and with that, that will conclude today's hearing. thank you. [inaudible conversations] >> if you missed any of this hearing, you can watch it anytime on light at our website, c-span.org. news out of washington state. the u.s. house corridor wouldn't a bill to overhaul the u.s. patent system. live coverage on c-span. this story from "the associated press." the white house is pushing to extend jobless benefits to long-term unemployed americans. the argument is that if benefits don't get renewed by the end of the month, more than 1 million

people will lose assistance which will slow economic growth to the government released a report today. new jobless numbers are due out tomorrow. democrats want to keep a program can federal jobless benefits to people after the 26 weeks of state benefits run out. the cbo says that would cost an estimate of $25 billion but estimates say it would also stimulate the economy and create jobs. also, this from the associate press, president obama ordering the federal government to nearly triple its use of renewable sources for electricity by 2020. the president said the government should lead by example. he also says plants use renewables for 20% of electricity will help reduce pollution, the cause of global warming, promote american energy independence and boost domestic energy sources such as solar and wind power to provide thousands of jobs. coming up at 1:15 eastern today

here on c-span2, senate judiciary committee chair patrick leahy from vermont to talk about the obama administration's policy on human rights as was future congressional action. he will appear at the second annual human rights summit hosted by the group human rights first. >> friday on c-span "washington journal" looks at the mission and role of the national institutes of health. starting live at 730 am eastern. >> all with your calls and comments live on c-span.

>> as you walk in the our tables out in front with lots of pamphlets, prior to entering the country. the pamphlets are how the government is trying to take away your right to own guns, the government is doing this and obama is doing that and obamacare's table. so those with the kind i wanted to talk to because those with guys with the leaflets, the ideas. so i said -- i said i'm an academic. i'm research and funding research on these organizations t,these ideas and trying to understand the guys. and i study men who believe this stuff. and a bunch of them looked at me suspiciously and said, so to ask questions but and i just had look, here's what i am. i don't get it. but here's my job. i want to understand you guys view the world. i want to understand that your worldview. it is, look, you will not

convince me and i will not convince you. that's off the table. what is on the table is i want to understand why you think the way you do. >> downward mobility, racial and gender equality. michael kimmel on the fears, anxieties and rage of "angry white men" sunday night at nine on "after words." part of booktv this weekend on c-span2. >> the editor of the uk newspaper of "the guardian" testified before the british home affairs committee yesterday in london. alan rusbridger defended his newspaper's decision to publish leaks surveillance isles from edwards to "the guardian" has come under heavy criticism for publishing intelligence information that british spy chiefs have called damaging to british security. mr. rusbridger confirm "the guardian" have access to over 58,000 files but is only published 1% of the information received by mr. snowden.

>> can i call the committee to order? and welcome eyewitness today's session, alan rusbridger, the other of the coding. mr. rusbridger, you are giving evidence as part of the committees inquiry into counterterrorism. and thank you very much for coming here this afternoon. could i be for all those to the register of members interest where the interests of the members of this committee are noted. and could ask other members to declare any special interest? >> thank you. i have written two articles for the garden on this issue which i was paid for. >> thank you very much. i should say we're all guardian readers, some were avidly than others, so we all declare our interest. as we do this morning. mr. rusbridger, start with some

facts and members of the committee will, and probe you on a number of issues. can we just declared at the start that this reference made to some newspapers that you have been compelled to commit against your wishes. we wrote you an invite you to comment and you are here as part of that inquiry. you don't feel under any compulsion, do you? >> i wasn't aware of is optional, but i'm glad to be here. >> but you said yes, so there was no need to take that further. on the question of facts you said in your written evidence regarding that with respect to the information you got from mr. snowden, you only published 1% of the information that you were given, is that still correct? >> it's approximately correct. we continue to publish stuff but it's about 1% of what we are given. >> as far as i can see, you've

had 58,000 files. you are telling this committee that only 1% of the information in those files has now gone public? >> yes. >> where are the other files? >> can i get some show context which i think would help you understand about this, because i think it's important to realize that the initial leak from edward snowden -- >> will come to that in a minute, mr. rusbridger. if you could just as dubbed the facts are me and please do put in context. these are factual questions the committee would like. you've got a lot of files, 50,000 files and published 1%. where are the other files? >> well, as i would've explained, this is an ongoing story that we are writing. if you think it's sensible that i talk to you about where the exact files are, i'm happy to write to you but i'm not sure that that is a really sensible thing to do, the existence of other files in different bits of the world. >> but there are other files under control in different parts of the world?

>> there is one file which will join with "the new york times," which is obviously in new york. >> and the other files are under proper -- this is important in respect to the inquiry. obviously, the context, there is criticism that some of these files may not be under your control. they are all under control one way or the other? >> one of it as a would've explained, i think would be helpful if i could give some context because it's important to understand that there were four different sets of information that went to four different parties in four different countries in three different continents. i think it's important to establish that to begin with the one of them was "the guardian," one of them was the "washington post," clearly not under my control. one went to we owe and one went to germany. that's the hand of cards if you like we're all dealt. the security services,

government. so i can obviously say that the "washington post" files are under my control, because they are not. >> we are in touch with the new times that we may take evidence from "the new york times" in the future, written or oral. but in terms of the files under control, 95% of which has not been published, you have full control, you know with our. they are secure and in a place where you feel they can get into other people same? >> i believe that to be true. >> now, you also said in reply to my parliamentary college, julian smith, in a letter that was published that are 850,000 people in the world who have the same information as you have in those files. >> we were told that 850,000 people, this goes to the original leak, which is obviously the thing that people are most concerned about. at eight and 50,000 people have access to the information that a 29 year-old into why it wasn't

even employed by the american government have access to. >> do these 850,00 850,000 peops negativity, a people who have got security clearance or they would know what was in the files that you have? >> obviously people were a guest. i think people at gchq were were aghast that when were aghast that when i go and why not even employed by the american government could get access to their files. and i was told the figure of 850,000 people who had that kind of access. >> so part of that fence because there's a lot of controversy regarding your publication of this information. that you may have this information so to eight and 50,000 other people and they are also in the same position if they choose to be, as mr. snowden was, to release this information. so there is safety in numbers, in other words? >> i think the point is that twice in the last three years is a giant database that were created after 9/11 have proved

poor us. -- poorest. the secret things that escape and that is because so many people have access to them. that is one point i think we're trying to make and when people talk about the use the word catastrophe or the fact that there's been this catastrophic loss, people compared it with mclean and burgess, philby, all kinds of things. that was done to the original beat and that was the 29 year-old who was one of hundreds of thousands of people had access to information and i'm sure that something that everyone must now be considered what to do about it. >> in respect to what was said to her sister committee the intelligence and security committee, you were criticized. your newspaper was and the decision you took by the heads of the security services, and this is your opportunity to answer them. mr. andrew parker described what